Bristol Myers Squibb to Acquire Karuna Therapeutics for $14 Billion
Bristol Myers Squibb announced on Friday that it has agreed to acquire biopharmaceutical company Karuna Therapeutics for $14 billion in cash, or $330 per share. This acquisition is expected to help expand Bristol Myers’ drug pipeline and strengthen its position in the neuroscience space.
Stock Performance
Following the announcement, Karuna’s stock surged more than 47%, reaching around $317 per share. Meanwhile, Bristol Myers Squibb shares rose more than 2%.
Expanding Drug Pipeline
The acquisition of Karuna Therapeutics will enable Bristol Myers Squibb to enhance its drug pipeline. The company has been facing competition from generic offerings, which has impacted the demand for its blood cancer drug Revlimid in the third quarter of 2023.
Approval and Closing
The boards of directors at both Bristol Myers and Karuna have unanimously approved the acquisition. The deal is expected to close in the first half of 2024, according to a release.
Karuna’s Medications
Karuna Therapeutics specializes in developing medications for patients with neurological and psychiatric conditions. Its lead asset, KarXT, is an antipsychotic expected to be used as a treatment for adults with schizophrenia starting in late 2024. The company is also evaluating KarXT as a potential treatment for Alzheimer’s disease psychosis and a form of bipolar disorder.
Positive Outlook
Bristol Myers Squibb CEO Christopher Boerner expressed optimism about the acquisition, stating, “There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space. We expect KarXT to enhance our growth through the late 2020s and into the next decade.”
Advisors
Citi and Gordon Dyal & Co advised Bristol Myers on the deal, while Goldman Sachs served as the exclusive advisor for Karuna.
With this acquisition, Bristol Myers Squibb aims to solidify its presence in the neuroscience market and drive future growth through innovative treatments.
–CNBC’s Annika Kim Constantino contributed to this report
